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What are the legal differences between a company that is in "liquidation" as opposed to "receivership" under Australian law?

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There are 4 types of "insolvency" in Australia, three apply to incorporated entities and the last, bankruptcy, only to individuals.

  • Receivership A receiver is appointed by a secured creditor, usually a bank, under the terms of the loan. Their job is to manage the company in the interests of the person that appointed them.

  • Administration An administrator is appointed by the directors (voluntary administration) or, less frequently, by a receiver, liquidator or the court. Their job is to inspect the company and make a recommendation as to if the company should enter a deed of company arrangement with its creditors, be liquidated or, very rarely, be returned to the directors' control.

  • Liquidation A liquidator's job is to sell of the assets of the company and from the cash generated pay off the creditors and, if anything is left, the shareholders and then deregister the company. A company may also be voluntarily liquidated if it has assets of less than $1,000 and no liabilities.

  • Bankruptcy an insolvent person can enter into a Personal Insolvency Agreement with their creditors or go bankrupt.

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